The European Bank for Reconstruction and Development (EBRD) has made a significant investment of €35 million in a green bond issued by Erste & Steiermärkische Bank (ESB), the Croatian subsidiary of Austria’s Erste Group Bank AG. This investment is part of a larger €400 million international issuance listed on the Vienna Stock Exchange.
Notably, this green bond issuance marks the first of its kind by a bank in Croatia, demonstrating ESB’s commitment to sustainability. The net proceeds from the bonds will be dedicated exclusively to financing eligible green projects, aligning with Erste Group’s Sustainable Finance Framework introduced in April 2021.
The investment by EBRD serves to advance three strategic goals in Croatia: strengthening the local capital market, enhancing the resilience of the banking sector, and fostering the development of the green economy. By supporting ESB’s regulatory compliance, diversifying its funding base, and bolstering its loss-absorption capacity, the issuance contributes to the bank’s overall resilience. Moreover, it promotes the green agenda in Croatia, aligning with global efforts to combat climate change.
Furthermore, the bond issuance aids ESB in meeting regulatory requirements for own funds and eligible liabilities (MREL), facilitating the bank’s growth and operations. Notably, this marks EBRD’s sixth investment in an MREL-eligible bond issued by a Croatian bank, with three of these investments supporting ESB specifically.
Since its inception, the EBRD has been a key investor in Croatia, with investments exceeding €4.7 billion across 248 projects. This latest investment underscores EBRD’s commitment to promoting sustainable finance and supporting the development of Croatia’s banking sector and green economy.
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